I'm finishing the ceiling on my basement. I'm planning to insulate the ceiling with the Roxul Safe'n'Sound Fire & Soundproofing Insulation. It is 3 inches thick so it only occupies the upper 3 inches of the bay.

I was planning to use IKEA's BLIXT recessed spotlight. However, I have a concern with its clearance requirements: top of luminaire to overhead building member 0.5"; luminaire center to side building member: 12". My joist spacing is b/n 11" and 15" so I can't possibly satisfy that. Those requirements sound a bit extreme, don't they?

From what I could quickly research I think these fall into the "Marked Spacing Type Luminaries" category, according to:

2 Answers
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I personally would abandon them for something with better requirements - there's a reason that IKEA stuff is low in price, and that reason is compromises. For instance, the GORM shelving units are strong and flexible, but take a while to assemble and are kinda ugly.

In this case it looks like the compromise is the required spacing. My guess is that the heat load they produce (especially the temperature of the fixture itself) is high enough that they need the extra space to cool (a different, more expensive, fixture might have some other way to ditch the heat that would require less space).

That said, any engineer worth his salt (and his lawyer) isn't going to skimp on the required spacing. It's very likely that you could get away with shaving a few inches off of it, but there are no guarantees if you start violating the spacing requirements.

The biggest worry in my mind would be that if something went wrong (even if it had nothing to do with these fixtures), the insurance company would balk because these fixtures were installed 'improperly'.

As said above, the motivation is the heat dissipation and risk of fire. With today's LED technology this risk is no more as long as LED bulbs are used. The insurance issue would still remain, and you could be held responsible in case someone later install an halogen bulb.